Cassandra: Liberty Media and Formula 1 must Respond to the Imminent Death of Traditional Television

By Graham K. Rogers

Television viewing is in the middle of a quiet revolution. Like the failing newspapers that have failed to respond to the Internet, TV companies are seeing their viewership numbers plummet. Like Dorna with MotoGP, Liberty Media who have just taken control of Formula One should embrace these viewing changes and provide online access through subscription.

Outline

Last night (here) the Bahrain Grand Prix was run at a time that was traditionally convenient for European viewers. Although the market in Thailand (where I am) is small, the rest of the region includes Indonesia, Malaysia and Singapore, with a considerable following. To the West are India and the Middle east; to the East, China. There is also the USA, although for Formula One, the number of adherents there is still small, with a preference for oval circuit racing, something that makes as much sense to me as soccer or American football.

Although I have followed GP racing since the engines were in the front and attended racing at European circuits, like many, most of my input has been via television and I value not only the races, but also interviews and insight: Martin Brundle and David Croft particularly stand out for me. This year, I am not watching the racing on TV. I am not watching at all. I cancelled my TV account with the local company following my own viewing changes.

Let's Blame Apple

In my case the Apple TV (series 4) made the difference, particularly when Netflix went worldwide. There are other channels available to me, although the selection is nowhere near as wide as is available in the USA. Twitter and other online links helped here as, with some filtering, all of the news I want - probably more than many may read - can be had on the internet.

As well as Netflix, I also subscribed to iFlix: a regional (Malaysia-based) video on demand service that has some good series too. I took this up about a year ago, because I was told that development work was being done on an app for Apple TV, but this has not yet appeared more than a year later. I may let this go next year if that app fails to appear, but also (in part) because of the tone of customer service emails. For the moment this works fine on an iOS device and I can stream this to my TV using AirPlay.

Another wrinkle

The other essential in my viewing strategy is MotoGP: the 3 classes of the 2-wheeled world championship series. Like ZF1 I have followed this for years and remember Agostini, Hailwood and Sheene and many others. This is also on TV and like F1 has a timing app that I found useful. Unlike Formula One, Dorna which owns the rights to the series (in the same way Liberty now owns the rights to F1) has provided a subscription service since 2014.

With this I can view races live (via the Internet) and if any are past my bedtime, I can view them the next day, or whenever I like, at my convenience: not when the cable company dictates. There are also no breaks for advertising, something which infuriates me with television transmissions, as (Sodt's Law) something significant invariably happens during these breaks. I am happy to pay a (€99) subscription for this service and would probably pay more for the flexibility and enjoyment it provides.

A plus B Does not Equal C

With the range of viewing I have using the subscription services and the other apps that access content on the internet at times convenient to me, I soon found that being shackled to scheduled services that the cable company sticks to, was not to my liking. Almost all my viewing was through internet services, with one exception: Grand Prix racing.

My annual fee for iFlix is 1,000 baht (just under $30), while my monthly fee for the cable service was around 1,500 baht ($44), so watching only F1 on cable did not make economic sense. I pulled the plug and as a stop-gap follow the Grand Prix races using the timing app and the live commentary, which apparently comes from BBC Radio 5: not exactly Brundle & Croft, but I have a good imagination.

Numbers of traditional TV viewers are shrinking and there has been much comment in media and online concerning this. Only last week, Shelly Palmer outlined how those companies that have always been held up as successful media conglomerates are on the cusp of a major change with internet content providers like ". . . Amazon, Netflix, Google/YouTube . . . about to take a huge bite out of traditional network TV".

But this warning is nothing new and the viewer metrics, like circulation numbers and web hits for print-based media have also dropped alarmingly: especially alarming for the proprietors whose complacency saw them unable to adjust while new media services took their crowns. The same is happening to traditional TV. And when the numbers fall - viewers, newspapers sold, website hits - advertising revenue drops too.

Red Flags

The former head of Formula One Management - what is now controlled by Liberty Media - put together a formidable package of television coverage starting in the late 1970s which has generated much wealth for Formula One, including the teams, but which has depended up to now on advertising when the races were shown on television worldwide. Like Premier League in the UK and NFL in the USA, viewer numbers are falling: 20% and 12% respectively. Likewise, viewer numbers for Formula One have dropped with David Nelson (F1 Broadcasting Blog) reporting a significant drop in UK viewing figures between 2015 and 2016. Other commentators mention similar falls in TV viewer numbers worldwide.

Liberty Media has taken the reins of Formula One at a time when revenue from TV transmissions - linked to viewer numbers - is probably dropping. It is unlikely that TV will simply stop, and many will have no wish to switch to other media, so television will retain its primary position for Formula One.

I have long advocated that the secondary approach that Dorna uses for its series - online access by subscription - should be embraced by Formula One. In this way, the races are sent directly to the subscription-paying viewers, with no middleman and no advertising. When Dorna first introduced this, there was some friction with the TV companies, particularly in Spain where the sport is highly popular, but this is available worldwide.

Nicholas Negroponte predicted the changes in media uses back in the 1980s, with reversals in connection types: the Negroponte Switch. Phones have now changed from cable-based to wireless connections; and television from signals travelling over the airways to cable and now the internet. The lines in the graph are intersecting again with traditional television heading downwards while internet viewing rises.

As Liberty Media is not new to the Internet, I look forward to a time (hopefully sooner rather than later) when an internet subscription service will be available to followers of Formula One.
The alternative is a continuation of viewing numbers that will inevitably affect advertising revenue: nothing will come of nothing.

Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs. After 3 years writing a column in the Life supplement, he is now no longer associated with the Bangkok Post. He can be followed on Twitter (@extensions_th)